Fenimore Asset Management, Inc. on SPS Commerce, Inc.
Thesis
SPS Commerce is using its proprietary data and specialist domain knowledge to develop AI capabilities. Early implementation has been promising and has eased fears that AI will make the company less relevant. Fenimore also notes acquisition speculation as a possible additional catalyst.
“their proprietary data and domain expertise are off to a promising start.”
Key risks
- AI disruption may still erode its core software business
- Early AI initiatives may not create sustained growth
- Acquisition speculation may not result in a transaction